Using JanuaryEffect for Predicting The Future

Posted by integraoption on April 29th, 2016

Whenever January hits, the investors look forward for the Januaryeffect. It is the phenomena in which you buy back the stocks that you dumped at the end of the year for making your portfolio look attractive. The purchase is made on cheap rate and the reason of this purchase is psychological. However if you take a deep look into it, it really does make sense and it leaves a hugeimpact on the way you trade. The only problem is that It can be hard to predict what the become back will be and what was the reason of the fall in the price.

The most effective way of guiding this is to look at the fundamental indictors. You can do so by determining the worth of the stock of the company. Thisactivity is easy but it is going to take some time and investigation.

So how it is done? You first have to determine the overall worth of the company. This can be done on the balance sheet of the company. After this, you must take the number of shares of the company that exists and divide them by the worth of company. This is going to give you a price which is known as the price per share. The closer this number is to the current trading price, the efficientmarkets are going to be. if you get a price higher than what the company is trading the stock at, then that means you will be giving a strong chance of seeing the share price go opt. this will help you in finding the huge long term trades.it is going to be helpful for those who want to hedge against the unpredictable short term losses by placing accuratetrades. The best thing is that you don’t have to conduct through research, most of the information is already available variouswebsites that provide information about stocks and share of the company.

Whatever that happens in January can be used for predicting what will be happening in the rest of the year. The results actually have proven to be effective. Theaccuracy is 75% so it is always worth it to figure out how the market is going to perform or what direction it is going to go in the year. Sometimes, it is going to be coincidental and sometimes it might be the physiologicalresponse of the traders. The reactions will help you in designing a trading strategy that is beneficial for you in the long run for the comping year.

There are some necessary parts that you have to consider when it comes to formulating the long term strategy. Always keep in mind that trading with a greater overall trade is going to be far better than trading against a single one. You will get an edge in your strategy if you see a slight increase in the probability of success with any given trade. So, what are you waiting for, do some calculations and perform some research to come up with the results.

For more info please visit at - https://www.integraoption.com/

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Joined: April 29th, 2016
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